After a year-long competitive selection process, PIDC, Philadelphia’s public-private economic development corporation, has selected a team comprising Ensemble Real Estate Investments and Mosaic Development Partners as its partner for the next phase of development at the Philadelphia Navy Yard. The partners expect the development of an additional 109 acres at the Navy Yard could generate up to $2.6 billion in new private investments and create thousands of new jobs.
The focus of this next phase of development at the Navy Yard, which currently has about 7.5 million square feet of office, retail, industrial, R&D and institutional property types, will be office, R&D and residential along with retail and makerspace. PIDC began the search for developers in September 2019 and received more than 35 responses to the Request for Qualifications in December 2019. Five teams were shortlisted and invited to submit full proposals and filed their proposals on May 22. After detailed review and evaluation of the proposals and virtual team interviews with an advisory panel, PIDC selected the Ensemble/Mosaic team. The parties are expected to finalize a development agreement shortly and pre-development work for the first project is expected to begin in 2021.
Jennifer Tran, director of Navy Yard marketing & communications, told Commercial Property Executive the final site layout and space projections will be established through a joint master planning process. She noted the first project will be identified early in the master plan process.
But it’s clear that residential and mixed-use buildings will be part of the focus of this next round of major development at the Navy Yard, a former military and industrial complex that is now home to nearly 15,000 employees and 170 employers, including Urban Outfitters, which has its headquarters there, and GSK, which has its North American headquarters there. Other employers include Jefferson Health, Axalta’s Global Innovation Center, U.S. Navy engineering centers, and a graduate engineering, business and research campus for Penn State University, along with numerous life science and technology startups, manufacturers and corporate R&D facilities.
“For residential, there will be a mix of renovated historic buildings and new construction planned over the course of the development,” Tran told CPE. “Buildings 624 and 83 will be redeveloped into residential with plans for active ground floors.”
Navy Yard growth
Philadelphia Mayor Jim Kenney said in prepared remarks the announcement of the next phase of development “marks a significant milestone for this long-term public-private partnership led by PIDC that has brought the Navy Yard from the uncertainty and job losses of the early 1990s to a dynamic home to more than 175 companies and 15,000 employees.” He added the Navy Yard has “fulfilled its initial promise of becoming a thriving center for business, innovation, investment, talent and jobs, establishing itself as one of the city’s major engines of economic growth.”
PIDC said the public-private partnership is committed to providing opportunities for all Philadelphians to share in the next stage of the Navy Yard development. The teams plan to have participation by minority- and women-owned business enterprises (M/WBE), including in construction and operations and seeking small businesses for retail and makerspace opportunities. Mosaic Development Partners is a Philadelphia-based, certified MBE development and project management company founded in 2008 by Gregory Reaves and Leslie Smallwood-Lewis. Since 2012, the firm and its partners have secured financing, invested and initiated more than $200 million in the region and developed quality retail, commercial, recreational and residential space. Ensemble, based locally at the Navy Yard and headquartered in Long Beach, Calif., develops health-care, hospitality, commercial and urban multifamily and mixed-use projects. Ensemble built the 172-key Courtyard by Marriott hotel at the Navy Yard in 2012 and expanded it in 2016. Since that time, the firm has developed, acquired or is in development of 14 properties totaling 1.3 million square feet over 45 acres at the Navy Yard.
While PIDC and the Ensemble/Mosaic team expect to begin pre-development work next year, Tran said the COVID-19 crisis might impact progress. “Like landowners and developers across the country, PIDC and the Ensemble/Mosaic development team are closely monitoring the COVID-19 situation. All the planning and development will be informed by public health and safety considerations and market requirements,” Tran told CPE.